American Giving Continues Slow, Consistent Recovery

Americans gave an estimated $316.23 billion to charitable causes in 2012, representing 3.5 percent growth (1.5 percent adjusted for inflation) from the previous year, according to Giving USA 2013: The Annual Report on Philanthropy. While this continues the trend of growth that we have observed since the recession, the current pace suggests that it could take another six to seven years for giving to return to pre-2008 levels. Because giving closely tracks the economy at large, key economic factors (personal income, personal consumption, employment levels and investment markets) could alter this pace and the overall level of giving further.

"Overall, growth in giving was restrained. But there are signs that individuals, the largest source of giving, are beginning to consider more asset-based giving. This development could be quite positive going forward," says Peter Fissinger, President & Chief Executive Officer of Campbell & Company, a national fundraising consulting and executive search firm. "By continuing to strategically build relationships with their best donors and prospects, nonprofits can help ensure their sustainability and growth in these challenging times."

Other key findings from Giving USA 2013 include:

Giving by Source

• Individual giving rose to $228.93 billion, a 3.9 percent increase (1.9 percent adjusted for inflation) over 2011. This figure may have been checked by economic uncertainty, which resulted from contrasting positive and negative indicators, including growth in the S&P 500, slightly higher home values, lower unemployment and reduced gas prices coupled with budget and tax reform debates.

• Corporate giving, including cash gifts, in-kind contributions, and corporate foundation grants and gifts, rose to an estimated $18.15 billion, a 12.2 percent increase (9.9 percent adjusted for inflation) from 2011 levels. Significant in-kind gifts from major pharmaceutical companies drove an appreciable portion of this growth.
   

Giving by Sector

About Giving USA Foundation™

Giving USA is a public outreach initiative of Giving USA Foundation™, which was established by the Giving Institute to advance philanthropy through research and education. Headquartered in Chicago, the Foundation publishes data and trends about charitable giving through its seminal publication, Giving USA, which has documented who gives what to whom for more than 50 years, and quarterly newsletters on philanthropy-related topics. To learn more visit www.givinginstitute.org.

How to obtain Giving USA 2013

Giving USA is the longest running and most comprehensive report on American philanthropy. A free executive summary of Giving USA 2013 can be downloaded online at www.givingusareports.org. Other products include the complete report; Giving USA Spotlight – quarterly research reports; and PowerPoint presentations for board meetings. Use the code CAMS1131 to receive 10% off any Giving USA products. 

Join the Conversation!

You can follow and join in the conversation on Twitter using the tag #GivingUSA2013.  

Campbell & Company is holding Giving USA programs in Chicago, Cleveland, Los Angeles, Silicon Valley, and Washington, DC, as well as a national webinar.

To learn more about our events, click here. 

Campbell & Company is a national consulting firm offering advancement planning, fundraising, communications and executive search services for nonprofit organizations in the education, health and medicine, arts and culture, environment, social service, and professional society fields.

Through thirty-seven years and thousands of engagements, Campbell & Company has helped nonprofit organizations anticipate and manage the challenges of the philanthropic marketplace. The company maintains offices in Chicago, Los Angeles, Portland, the San Francisco Bay Area and Washington, DC. For more information, please telephone (877) 957-0000 toll free, email info@campbellcompany.com or visit www.campbellcompany.com.

Building a Strong, Compelling and Consistent Case for Support

In Case Development 201, Director of Communications Consulting Andrew Brommel offers  a collection of practical, immediately applicable  “tips and tricks” for building a strong, compelling, and consistent case for support.

For Brommel, an organization’s case for support is ultimately “your message to your donors—why should they give to your organization?”  He asserts that, “If this is all we ever thought about with a case for support, we’d be fine.”

Just as a case for support should be comprehensive in reflecting an organization’s vision, it should be a collective effort—one that engages Board members, staff, and leadership in the composing and shaping process. Messaging, Brommel argues, is “the most important. It’s the core … This is where your case comes from, and everything else we’re talking about is secondary to this.”

Effective messaging should express only one key idea per message, and should have an edge or make an assertion—not “ a statement of something this is universally, obviously true.” Brommel asserts that, in the non-profit sector, “we probably do too much writing, and not enough messaging.”

Two key benefits of establishing, clear, consistent messaging is that everyone in your organization, from volunteers to Board members, is pulling from the same unified, agreed-upon points, keeping communications consistent. In addition, these messages are endlessly versatile, and are easily transferrable to writing documents, talking points, and PowerPoint, video, or iPad presentations.

As a sample format for these messages, Brommel suggests you “throw a headline up there, and give it a few supporting points.” While the headline takes a position, each supporting point will elaborate on and clarify this position.

To write effective, clear messaging of your own, try this process:

• Write 3-5 messages that simply “get your donor from Point A to Point B,” or from a lack of engagement to deep involvement.

• To start, establish that an issue exists, and why it matters

• Then, credential your organization as an effective institution to address the issue. Use this message as an opportunity to differentiate yourself from other organizations with similar missions

• Next, assure potential donors that you have a plan in place that will enact real change

• Remember, that you can often make a stronger statement by saying less

In the following examples, Brommel uses pairs of weaker and stronger messages to demonstrate how to build the most effective, specific messages for your organization:

1. Have conviction. Make a strong statement.

Weak: Our university helps students build the skills they need to become leaders.

Stronger: We believe every student has the power to lead.

2. It’s not about you. It’s about the people you serve.

Weak: We believe our community needs a healthcare provider committed to caring for us all.

Stronger: We believe everyone in our community deserves great healthcare.

3. Think voiceover, not prose. Short and to the point.

Weak: Among all the ways we can invest in our school’s future, the endowment is the most important, ultimately surpassing the impact of capital and program investments.

Stronger: The endowment is the most important investment we can make in our school’s future.

4. Don’t say everything. Say what matters.

Weak: As a nonprofit, community-based organization, we rely on the philanthropic support of our donors and neighbors to make our work possible.

Stronger: Only you can make our work possible.

For more helpful tips on developing a strong case for support, including use of stories and statistics, the three crucial levels to think about in all case development, and more specific examples, watch Andrew Brommel’s webinar, Case Development 201, here.

Questions? Contact Andrew Brommel at andrew.brommel@campbellcompany.com.

Campbell & Company Announces First Look: Giving USA 2013

Campbell & Company announces a series of dynamic events around the forthcoming Giving USA 2013 report, which will be released at 12:00 a.m. ET, on Tuesday, June 18, 2013.

Giving USA 2013 series of events will give you a powerful tool for understanding and navigating the current philanthropic environment. You will learn about broad and sector-specific philanthropic trends, potential opportunities and challenges going forward, and implications for your fundraising goals and strategies.

The First Look events will include:

• Giving USA National Webinar:June 18, 2013, 12:00 - 1:30 PM CT

• Giving USA Chicago: Northwestern Memorial Hospital, June 18, 2013, 8:00 – 9:30 AM CT

• Giving USA Cleveland: Crowne Plaza (Independence, OH), June 19, 2013, 11:00 – 1:30 PM ET

• Giving USA Washington, DC: Studio 1 at NPR, June 19, 2013, 8:00 – 10:00 AM ET

• Giving USA Milwaukee Event: Alverno College, June 19, 2013, 8:00 – 9:30 AM CT  

• Giving USA San Franscisco: Ronald McDonald House at Stanford, June 20, 2013, TBD
  

• Giving USA Los Angeles, Omni Hotel, September 17, 2013, TBD

Join in and follow the conversation on Twitter using the tag #GivingUSA2013.

Campbell & Company is a proud sponsor of Giving USA. Giving USA 2013, was compiled by The Center on Philanthropy at Indiana University for the Giving USA Foundation.
 

About Campbell & Company

Campbell & Company is a national consulting firm offering advancement planning, fundraising, marketing communications and executive search services to nonprofit organizations in nearly every sector. Through thirty-six years and more than a thousand engagements, we have helped our clients anticipate and manage the challenges of the philanthropic marketplace. Our offices are located in Chicago, Portland, Los Angeles, the San Francisco Bay Area and Washington, DC. For more information, please call toll-free (877) 957-0000, email info@campbellcompany.com or visit www.campbellcompany.com.

New Study: CDO Confidential - What CDOs Want You To Know About Retention

 A National Study on Nonprofit Chief Development Officer Retention

Chicago, IL - A newly released study CDO Confidential: What CDOs Want You to Know about Retention reveals that unrealistic expectations set by management have reduced the average Chief Development Officer (CDO) tenure to one to two years. Other factors include a lack of sufficient resources and cooperation among CDOs, CEOs and Boards. Campbell & Company, a national nonprofit consulting and executive search firm, recently completed a nationwide survey to understand the reasons behind this trend. CDO Confidential received responses from more than 400 Chief Development Officers and Chief Executive Officers to gain multiple perspectives. The sample included organizations with a wide range of missions, budgets, staff sizes and geographic areas.  

“This study shows that the CDO retention is not an insulated issue,” says Marian Alexander DeBerry, Director, Executive Search at Campbell & Company. “Shorter tenure in leading development roles not only leads to difficulty maintaining donor relationships, but also hinders the development and execution of long-term fundraising strategies. The implications of having short tenure are vast ranging from attracting and evaluating talent to onboarding to succession planning and require a wider, more in-depth dialogue with all parties involved.”  

Key findings include:

The report, CDO Confidential: What CDOs Want You to Know about Retention describes four main challenges:

Short tenure

Fifty-two percent (52%) of CDO served one to two years in their most recent position, confirming anecdotal evidence of shorter tenures.  

Unrealistic expectations

CDOs (75%) and CEOs (62%) cited unrealistic expectations are the number one reason behindCDO turnover.  

Reasons for departure

Twenty-eight percent (28%) of CDOs cited their organization’s lack of understanding of development as a reason for their most recent departure.  

Inadequate resources

Fifty-eight percent (58%) of CDOs felt they did not have the resources to do their job effectively, and twenty-nine percent (29%) of CDOs indicated professional development as their primary need.  

Click here to access the CDO Confidential report.

Campbell & Company is holding a series of conversations to discuss strategies to lengthen CDO tenure. Tips and strategies from these conversations will be released in future articles.

• On Monday, April 8 from 1:15 – 2:30 PM PST, Marian Alexander DeBerry, Director, Executive Search, presented qualitative and quantitative findings from a nation-wide survey at the 50^th annual conference on fundraising at the Association of Fundraising Professionals (AFP). Learn more here.

• On Wednesday, April 24, at 12:00 PM CST Andrew Smerczak-Zorza, Consultant, Executive Search, led a panel discussion regarding the results of the survey during a Campbell & Company webinar.

• On Wednesday, May 22, from 8:00 - 10:30 AM CST, Marian Alexander DeBerry, Director, Executive Search together with CompassPoint, will discuss the findings of two independent surveys, CDO Confidential and UnderDeveloped, during a luncheon at the Donors Forum.

Additional Resources

• Full report (PDF)

• Webinar Recording: CDO Confidential: What CDOs Want You to Know About Retention (But Are Too Afraid to Tell)

About Campbell & Company

Campbell & Company’s Executive Search team connects organizations with visionary leaders who can drive continued growth. We pay careful attention to the nuances and complexities of each client and draw on our extensive networks to find the ideal fit. Campbell & Company maintains offices in Chicago, Portland, Los Angeles, the San Francisco Bay Area and Washington, DC. For more information, please call toll-free (877) 957-0000, email info@campbellcompany.com or visit campbellcompany.com.

Edith Falk Quoted in Crain’s on the Price of Board Membership

Each year, board members face the required “give-or-gets”— the stated minimum annual donations board members either must give out of their own pockets or solicit from a corporation or well-heeled friend.

The give-or-gets guarantee a revenue stream each year and help ensure that board members   are invested in the organization and its mission. Fundraising experts predominantly praise give-or-gets as a sound nonprofit tool. However, there are drawbacks and not every nonprofit has the give-or-get policy.

Edith Falk, Chair of Campbell & Company, recently gave her take on how nonprofits use the give-or-get tool with Crain’s Chicago Business. "Some are very squeamish about putting a dollar amount there," says Edith Falk, Chair of Campbell & Company, a Chicago-based consultant to nonprofits. Ones that do "can be reluctant to publicize it," Ms. Falk says, fearing "unintentional consequences," for instance appearing too elite—or not elite enough.

For the complete story and a sampling of give-or-gets from nine local nonprofits click here.

International Forum to Discuss Communication Challenges

On Friday, March 1, the newly formed International Forum, sponsored by Campbell & Company and in collaboration with the UN Foundation, will meet for the third time in Washington, D.C., to discuss communication challenges and best practices for effective communication for international development organizations.

The discussion will be led by John Bender, Editor, The Nature Conservancy (TNC); Negin Janati, Senior Communications Officer, UN Foundation (Nothing But Nets and Million Moms); Rebecca Milner, VP for Institutional Advancement, International Medical Corps; and Andrew Brommel, Director of Communications Consulting, Campbell & Company.

In August 2012, Campbell & Company’s Washington D.C. team created the International Forum to give D.C.-area international development executives and senior fundraisers opportunities to network and discuss their common challenges. The Forum began with a mid-September breakfast attended by nearly two dozen directors and chief advancement officers from a cross section of organizations that fundraise domestically and internationally to support global causes.

Each breakfast meeting has a different topic and draws on pertinent issues facing the international development sector.

For questions concerning the international group in D.C., please contact dirk.sellers@campbellcompany.com.

CDO Confidential: What CDOs Want You to Know About Retention - Upcoming Webinar

Nonprofit chief development officers (CDOs) play a crucial role at their organizations and institutions, driving fundraising growth and philanthropic support, stewarding the board members, helping define organizational strategy, advising the Head, and shaping a range of policies.

On Wednesday, April 24, at 12:00 PM CST Andrew Smerczak-Zorza, Consultant, Executive Search will present qualitative and quantitative findings from a nation-wide survey regarding chief development officer retention conducted by Campbell & Company. Mr. Smerczak-Zorza will lead a panel discussion regarding the results of the survey, as well as panelists’ experiences at their current and past organizations.

Register for the CDO Confidential webinar.

About Campbell & Company

Campbell & Company is a national consulting firm offering advancement planning, fundraising, marketing communications and executive search services to nonprofit organizations in nearly every sector. Through thirty-six years and more than a thousand engagements, we have helped our clients anticipate and manage the challenges of the philanthropic marketplace. Our offices are located in Chicago, Boston, Portland, Los Angeles, the San Francisco Bay Area and Washington, DC. For more information, please call toll-free (877) 957-0000, email info@campbellcompany.com or visit www.campbellcompany.com.

Simple Guide to the American Taxpayer Relief Act of 2012

After months of debate regarding tax rates and other budget issues that could measurably affect philanthropy, Congress passed the American Taxpayer Relief Act (ATRA) on January 1, 2013. The bill resolves, for now, several issues affecting charitable giving, and in ways that appear favorable to philanthropy overall.

Congress will continue the debate about the budget, and issues affecting the charitable deduction may resurface. But ATRA imposes no major limitations on charitable deductions or caps on deductions. By making most of the Bush tax cuts permanent and by resolving gift and estate tax rates in a favorable manner, donors can consider charitable giving in relation to financial planning with confidence. In addition, by extending the IRA Rollover provision for 2012 and 2013, new opportunities for charitable giving are presented.

“As the dialogue about tax rates and deductions unfolded, nonprofit leaders across the country voiced their opinions regarding the value of the charitable deduction,” Campbell & Company President and CEO Peter J. Fissinger says. “The ATRA reflects the nonprofit sector’s advocacy, and acknowledges the importance of philanthropy to maintaining the critical services offered by nonprofit organizations across the country.”

Now that tax rates and the deductibility of gifts have been resolved, it is important for nonprofits to understand those provisions of ATRA that impact philanthropy and explain them to donors. “Many donors will have questions and doubts,” Fissinger says. We should work hard to let them know how ATRA works to extend most aspects of charitable deductions.”

Below, we summarize the most important takeaways more fully.

Itemized Deduction Limits
During final negotiations, lawmakers agreed not to impose a cap of 28%, or a hard dollar cap, on itemized deductions or other major limits on tax savings from charitable gifts.

Pease Amendment
While ATRA retains the charitable deduction, it reinstates an esoteric Clinton-era provision known as the Pease Amendment. Under this provision:

• Itemized deductions will be reduced by 3% of a taxpayer’s income above a specified threshold: $250,000 for individuals or $300,000 for married couples. In other words, a couple earning $400,000 per year ($100,000 over the $300,000 threshold) could see the value of its itemized deductions reduced by $3,000, and a couple earning $1.3 million per year ($1 million above the $300,000 threshold) could see the value of its itemized deductions reduced by $30,000. 

The Pease Amendment may impact the cost of large gifts made by very wealthy donors.  History suggests the overall impact on philanthropy will be relatively small.

Gift and Estate Taxes

• The $5 million exemption amount (with indexed increases) for gift and estate taxes is now permanent. The IRS is expected to announce an exclusion amount of around $5.25 million for 2013. 
• The top rate for gift and estate taxes is 40%.

IRA Rollover
Since 2006, IRA owners age 70½ and older have been able to make a qualified charitable distribution (QCD) up to $100,000 each year. ATRA extends and expands this option for 2012 and 2013 in multiple ways. 

• For individuals who made QCDs directly from their IRA custodian to charities in 2012, with the hope that the law would be extended and made retroactive: These QCDs are now qualified retroactive to January 1, 2012. 
• For individuals who did not make a QCD in 2012, there is now an opportunity to do so during January of 2013. Donors who make a QCD in January 2013 are eligible to make a second QCD in the remaining 11 months of 2013. 
• For individuals who had hoped to make a QCD in 2012 but instead received their required minimum distribution (RMD) in December, this new legislation offers an opportunity to transfer those funds to charity during January of 2013 without reporting the IRA distribution as income. With ATRA the December 2012 RMD can be converted to a January QCD that qualifies for 2012. 

This is a great opportunity to receive additional cash gifts this January. This incentive ends on January 31, making it important for nonprofits to move quickly to reach out to potential donors who received a December RMD and inform them about the opportunity to make a January cash gift, with significant tax benefits. 
If a donor chooses to take advantage of this opportunity, you will want to send a letter of confirmation that the donor is electing the QCD. 

Income Tax Rates

• Individuals with higher incomes are now facing larger taxes. The existing tax brackets of 10%, 15%, 25%, 28%, 33% and 35% will be extended, but there is a new 39.6% bracket for married persons with $450,000 of taxable income, heads of household with $425,000 of taxable income and single persons with $400,000 of taxable income. 
• High-income donors may make larger gifts in 2013. The tax savings from a charitable gift for individuals with state and federal tax brackets from 40% to 46% are now increased. 

 Capital Gains Tax Rates

• For the majority of taxpayers, the current capital gains rates will be extended: 0% for those in the 10% and 15% bracket and 15% for those in higher brackets. 
• Individuals in the 39.6% tax bracket will have a 20% capital gains rate. They will also be subject to the 3.8% Medicare tax making the capital gains rate for upper-income persons (married persons with $450,000 of taxable income, heads of household with $425,000 of taxable income and single persons with $400,000 of taxable income) 23.8%.

Conclusion
Though other Congressional showdowns loom—particularly over spending cuts that could impact nonprofits’ funding and work—the first hurdle has been cleared, and the American Taxpayer Relief Act is generally kind toward philanthropic giving. This is an opportune time to engage in conversation with your donors.  

• Although the higher marginal tax rates reduce disposable income for upper-income taxpayers this may be offset by the opportunity to deduct charitable gifts at the full bracket percentage.
• The extension of the IRA Rollover will continue to be an attractive giving incentive for some individuals with a special opportunity in January to increase giving in 2013. 
• Because the gift and estate tax rates and exemptions have been made permanent, nonprofits will now be able to have substantive discussions with donors about their charitable bequests.

At least for now, nonprofit leaders have a clear set of favorable outcomes. It is time to begin new conversations with top donors. 

About Campbell & Company
Campbell & Company is a national consulting firm offering advancement planning, fundraising, marketing communications and executive search services to nonprofit organizations in nearly every sector. 

Through thirty-six years and more than a thousand engagements, we have helped our clients anticipate and manage the challenges of the philanthropic marketplace. Our offices are located in Chicago, Boston, Portland, Los Angeles, the San Francisco Bay Area and Washington, DC.

For more information, please call toll-free (877) 957-0000, email info@campbellcompany.com or visit www.campbellcompany.com.

Inspired by #GivingTuesday Stories, Campbell & Company Gives Back

“What we spend, we lose. What we keep will be left for others. What we give away will be ours forever,” stated David McGee, pastor, author, musician.

These are the words that come to mind as we enter the hoiday season. It was in this spirit that not long ago we asked you to share your story of #GivingTuesday: a day that celebrates and encourages charitable activities that support nonprofit organizations. In celebration of #GivingTuesday, Campbell & Company requested submissions from people, asking to share how they contributed on the first official day of giving in the history of the United States. Campbell & Company pledged to donate 25 dollars to three charities representing three diverse missions. We were delighted to hear so many caring stories come our way from all corners of the nation. Your stories varied from supporting animal life in Rwanda and helping local Salvation Army efforts to backing social causes and promoting philanthropy by hosting events. Whether it was a donation to the Mountain Gorilla Veterinary Project made by Sally Zelonis, Barbara Linek’s time dedicated to plan a retreat for a group of Christians, or gift cards from Six Degrees so all of Susan McLaughlin’s family members could donate to their charity of choice, we applaud and thank you for your time and generosity. Campbell & Company donated $25 to each of the following organizations:	Barbara Linek Susan McLaughlin
• Family Bridges • Huntingdon County Humane Society • Mountain Gorilla Veterinary Project	Sally Zelonis

About Campbell & Company

Campbell & Company is a national consulting firm offering advancement planning, fundraising, marketing communications and executive search services to nonprofit organizations in nearly every sector.

Through thirty-six years and more than a thousand engagements, we have helped our clients anticipate and manage the challenges of the philanthropic marketplace. Our offices are located in Chicago, Boston, Portland, Los Angeles, the San Francisco Bay Area and Washington, DC. For more information, please call toll-free (877) 957-0000, email info@campbellcompany.com or visit www.campbellcompany.com.

The Federal Budget Debate: What You Need to Know and What You Can Do

As Congressional Republicans and the Obama Administration continue negotiations over the best ways to both reduce the federal deficit and place the U.S. on a long-term path of sustainable growth, positions on raising tax rates and reducing tax deductions for wealthy households shift regularly. Nevertheless, while the evolving debate can be difficult to follow, it is one that nonprofit leaders must not only be aware of, but contribute to—especially as lawmakers move closer to a final deal.

Since 1976, Campbell & Company has worked with thousands of nonprofit organizations to navigate the philanthropic marketplace, including in challenging economic situations. In addition to our on-the-ground experience, we are a founding member of and active participant in the Giving Institute, which produces the annual Giving USA report on philanthropy, and have sponsored a report by the Center on Philanthropy at Indiana University on the impact of proposed tax policy changes on itemized charitable giving.

In this article, we draw on both our experience and our expertise to provide the key information nonprofit leaders need to know to become a part of the discussion over the federal budget. After summarizing competing positions on tax rates and deductions, we explore their implications for philanthropy and suggest key steps you can take to prepare for potential policy changes.

What Could Happen?

In a shift from his earlier position, President Obama recently announced that he does not support any limit on charitable deductions in an attempt to raise revenue. Prior to this position, the President was in favor of capping charitable deductions at 28 percent. Additionally, the Obama Administration proposes to allow the Bush-era tax cuts to expire on incomes greater than $200,000 (250,000 for families), effectively raising top rates from 35 percent to 39.6 percent; according to the Congressional Budget Office, this could increase revenue by more than $820 billion over the next decade.

Congressional Republicans have held that a plan limiting all deductions—including healthcare, mortgage, state and local taxes, and charitable giving—and closing tax loopholes could save $800 billion over the same period. The GOP has cited three policy options from the Committee for a Responsible Federal Budget(CFRB), a bipartisan nonprofit organization:

• Limiting deductions to $25,000 for high earners: Under this option, individuals making more than $200,000 and families making more than $250,000 per year could not deduct more than $25,000 each year. A more progressive variant of this proposal would allow individuals making between $200,000 ($250,000 for families) and $400,000 ($500,000 for families) to completely deduct expenses up to $25,000 and partially deduct additional expenses over that limit. Individuals making more than $400,000 (or families making more than $500,000) would not be able to claim any partial deductions.
   
• Limiting after-tax value of high earners’ tax expenditures: A second option would limit the value, after taxes, of all tax expenditures, including deductions, tax exemptions and tax credits. (The CRFB cites examples including “all itemized deductions, the child tax credit and exclusion for employer-provided health insurance.”)
   
• Limiting expenditure values for the 28 percent bracket: The final option in the CRFB paper would limit the value of certain tax expenditures, again including deductions, credits and exemptions, for individuals and families in the 28 percent tax bracket. Individuals and families in higher tax brackets would have progressively lower limits to expenditures, and those with an annual income of $1 million or more unable to receive any value from expenditures.

  

   

   

   

   

   

   

  
  
  

Most importantly, nonprofit leaders need to remember that donors give, first and foremost, because of their generosity. A variety of economic and social science research has shown that charitable intent—not tax considerations—are the primary drivers of philanthropic support, and regardless of policy changes, the large majority of donors will continue to support the causes closest to them.How could this affect giving?

At the same time, tax policy affects the amount of philanthropy that even the most generous donors are able to contribute. The national average for all deductions exceeds $26,000, and proposed limits may leave some donors unable to deduct all or part of their gifts. According to the 2011 Center on Philanthropy study that Campbell & Company sponsored, capping itemized deductions at 28 percent for top earners would cause a $0.82 billion decline in charitable giving in the first year and a $1.31 billion decline in the second.

In addition, overall tax rates impact charitable giving, particularly since upper-income households provide a disproportionate amount of individual charitable gifts. According to Giving USA, aggregate individual giving closely tracks disposable personal income, which could be affected by increased marginal tax rates. The Center on Philanthropy’s analysis found that allowing the Bush tax cuts to expire for high earners could decrease itemized charitable deductions by $1.69 billion in the second year.

Finally, it is important to keep the overall economic picture in mind. Giving USA has consistently found that aggregate philanthropy hovers around 2 percent of GDP, and regardless of tax policy, a growing economy should increase disposable income and therefore charitable giving. This suggests that policies placing the U.S. on a path of economic growth will be critical to philanthropic giving and the long-term strength of the nonprofit sector.       

What can I do?

This is a unique partnership between philanthropy and public policy, and it presents an opportunity for nonprofit organizations to engage in dialogue with their board members, donors, community and Congressional representatives. We’ve provided you with some easy steps to take to add your voice to the evolving conversation:

• Communicate with your donors about these issues now, advising them not to panic, reminding them of the reasons they support your organization, and discussing their opportunities to give this year. Top donors should also be encouraged to contact their financial advisers.

• Explain to your staff, donors and volunteers the opportunity and importance of participating in the dialogue, both in your community and with your elected representatives.
   
• Contact your U.S. Representatives and U.S. Senators and ask them to support nonprofits and communities by protecting the charitable giving incentive.

Above all else, we urge nonprofits to ask significant donors for gifts before the end of the year and begin longer-term conversations with board members and other leading donors about proposed changes to the tax policy and their effect on their giving. We also urge them to actively participate in the ongoing debate and ensure that it accounts for nonprofit organizations and charitable giving.

Resources

www.GiveVoice.org provides a great resource for finding your U.S. Representatives and U.S. Senators

Chronicle of Philanthropy

About Campbell & Company

Campbell & Company is a national consulting firm offering advancement planning, fundraising, marketing communications and executive search services to nonprofit organizations in nearly every sector. 

Through thirty-six years and more than a thousand engagements, we have helped our clients anticipate and manage the challenges of the philanthropic marketplace. Our offices are located in Chicago, Boston, Portland, Los Angeles, the San Francisco Bay Area and Washington, DC. For more information, please call toll-free (877) 957-0000, email info@campbellcompany.com or visitwww.campbellcompany.com.